U.S. Private Equity Market Recap - June 2025

Read our latest insights into the U.S. private equity market. We cover monthly deal activity and size, fundraising, exits, leveraged loans, and a look ahead. To receive our private equity thought leadership, please join our mailing list.

Key Takeaways

• Deal activity: The U.S. PE deal market has been choppy in 2025 YTD as investors seek clarity on how various macroeconomic and geopolitical policies will play out. 
  
• Growth: Growth equity has emerged as a bright spot within the PE deal market in 2025, with deal count and value both up over 50% YTD. 
  
• Q1 earnings: Executives from public PE firms addressed the impact of trade policies on investor sentiment during their Q1 earnings call but remained optimistic about long-term opportunities and drivers for private capital.

U.S. PE Deal Activity

• Deal count: After a strong January, U.S. PE deal activity has been choppy as investors continue to grapple with geopolitical and macroeconomic uncertainties. 
• Deal value: While market uncertainty is impacting deal count, investors are doing larger deals and value is up significantly in 2025. YTD deal value is up 61% vs. the same period last year.

Fundraising Trends

• Fundraising: U.S. PE fundraising activity remains low in 2025. As of the end of May, both fund count and capital raised are tracking to finish down in 2025, -6% and -40%, respectively.  
• Fundraising momentum: On a positive note, of the funds that have closed so far in 2025, the average time to close has dropped from 2024 averages and fund targets continue to be exceeded. 

Tariffs and Cross-Border Deals

• Tariffs: Over the past two months, tariff policies have evolved and continue to do so, contributing to broader investor uncertainty. As of April 15, the Budget Lab projected pre-substitution tariff rates to be almost 28%, a projection that was lowered to 7% as of May 29. 
• Cross-border deals: U.S. cross-border PE deal activity is down 10% YTD compared to the same period last year. At its current pace, cross-border deal activity is on track to finish down 18% vs. 2024. 

Growth Equity

• Deal activity: Growth has been a bright spot in the PE deal market in 2025. YTD, growth equity deal count and value are up 57% and 63%, respectively. 
• Fundraising: Growth is experiencing a more active fundraising environment than U.S. PE more broadly. Growth strategies are on track to close more funds and raise more capital in 2025 than in each of the past two years. 

ECM Activity

• May PE-related ECM activity: While May only saw one PE-backed IPO, follow-on activity reached more normalized levels after a choppy start to the year. 
• SPACs: SPAC activity YTD is already approaching 2024 levels, and 2025 is on track to be the most active year since 2021. 

Public PE Firms Q1 2025 Earnings Highlights 

• Uncertainty: Executives across the firms acknowledged the period of market volatility and underlying uncertainties during their Q1 earnings calls but reaffirmed belief in underlying opportunities in private markets.  
• Deployment: Overall, PE deployment was up QoQ and YoY as firms sought opportunities in market dislocations amid the volatility. 
• Realizations: Dropping in Q1, realizations will likely continue to face headwinds. Blackstone CFO Michael Chae shared, “We expect realization activity in the near term to be affected by policy-driven uncertainty and market volatility.” 

Q1 Earnings Commentary

Blackstone

“Uncertainty around tariffs and the potential impact on economic growth and inflation has dramatically impacted investor sentiment. … Importantly, the economy entered this period in a fundamentally strong position. Productivity has increased significantly over the past several years, and technological innovation is accelerating, which are powerful tailwinds. … Our experience through many economic and market downturns has taught us some of the best times to deploy capital are in a risk-off world when sentiment is most negative.”

– Stephen Schwarzman, CEO and Co-Founder

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Carlyle

“We ended the year with a very high level of market optimism and very high expectations. The markets were fully risk on. Of course, as we saw, the recently announced trade policies very quickly impacted investor sentiment and risk appetite. … Although we are going through this period of uncertainty, the macro trends driving demand for private capital remain strong, and likely will be reinforced over the coming years. Over the past two decades, the number of public companies in the U.S. has been cut nearly in half, while the number of private companies has increased more than fivefold. For investors looking to drive returns and capture the next generation of market growth, private market access has never been more important.”

– Harvey Schwartz, CEO

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TPG

“We’ve witnessed a dramatic shift in the market environment over the last few months. Coming into 2025, there was broad-based strength across the economy, and confidence levels were near record highs. The market was anticipating meaningful earnings growth, accelerated M&A activity and rising equity valuations. Several factors, including tariffs and general policy uncertainty, have upended the environment and created significant volatility. As a result, we're seeing unusual market correlations, renewed fears of inflation and concerns around slowing economic growth. … Looking ahead, as we've seen in prior periods of uncertainty, overall deal volume across the industry may moderate. However, currently our pipelines remain robust.” 

– Jon Winkelried, CEO

Source: Earnings transcripts. 

A Look Ahead

• Slow capital flow persists: The PE flywheel remains sticky amid a subdued deal market and the slowdown in distributions. 
• Need for liquidity: The demand for distributions over the coming years is expected to significantly exceed the market’s current pace, according to a Pitchbook analysis. 
  
  • LP preferences: A Bain poll of Institutional Limited Partners Association webinar participants showed 60+% of LPs would prefer conventional exits over other liquidity alternatives, even at valuations below recent marks, if necessary. 
  • Secondaries: Notable LPs, including Harvard, Yale, and the New York City pension system, are exploring and taking advantage of secondary market opportunities to cash out of current PE positions. 
• Sector spotlights: Investors maintain favorable outlooks in sectors with strong tailwinds and growth prospects. 
  • Tech: The tech sector remains popular and leads U.S. PE investment count and value so far in 2025. 
  • AI deal strategy: Some VC firms are experimenting with PE-style AI roll-ups, acquiring mature and people-intensive businesses and then scaling them with AI. 
  • Energy: PE firms have rapidly grown investments in the energy sector this year, with deal value YTD through May already surpassing FY 2024 value. 
• Outlook: Market uncertainty is unlikely to dissipate in the near term, but firms should be ready to jump on opportunities. 
  • Exits: It will take time for the industry to work through its backlog of aging portfolio companies, making it important for firms to prioritize exits sooner than later. 
  • Long-term optimism: While recent sentiment has shifted from high expectations heading into the year, industry players maintain long-term conviction.